Hyundai Department Store's stock is experiencing a strong performance due to an increase in sales driven by foreign tourists. Recently, several securities firms have raised their target prices for the company.
As of 9:57 a.m. on June 16, Hyundai Department Store shares were trading at 193,100 won, up 9,900 won (5.40%) from the previous trading day. At one point, the stock surged nearly 7% to 196,000 won.
Analysts attribute the buying momentum to reports suggesting that sales from foreign tourists will continue to rise. Park Sang-jun, a researcher at Kiwoom Securities, noted, "The weak won and the impact of the Korea-Japan relationship have led to a significant increase in foreign tourists, particularly from China. We expect foreign sales to grow by approximately 50% compared to the same period last year, thanks to the rise in inbound Chinese tourists."
Lee Jin-hyup, a researcher at Hanwha Investment & Securities, added, "The increase in inbound tourists during the peak season is expanding demand from Myeongdong to Gangnam. We have seen changes in foreign sales growth since April."
The strengthening of the dollar is also seen as a positive factor. The decline in the value of the won has made South Korea an attractive shopping destination for foreigners. According to Hanwha Investment & Securities, while foreign sales at Hyundai Department Store increased by only 22% year-on-year in the first quarter, they surged by approximately 40% and 70% in April and May, respectively.
Recently, several securities firms have adjusted their target prices for Hyundai Department Store upward. This month, four firms, excluding Hana Securities and Leading Investment & Securities, have raised their target prices. Meritz Securities, Hanwha Investment & Securities, Korea Investment & Securities, and Kiwoom Securities have set their target prices between 170,000 won and 220,000 won.
However, concerns remain regarding Zinus, a subsidiary acquired by Hyundai Department Store Group for 880 billion won in 2022. Hana Securities projected that Zinus would report an operating loss in the second quarter similar to that of the first quarter. Nonetheless, it noted that since the end of May, Amazon orders have resumed, and efforts to improve cost structures, such as the sale of its Georgia plant and the reduction of logistics centers, suggest potential for future recovery.
* This article has been translated by AI.
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